The yellow brick road to securing digital transformation can be a tricky one to navigate.
However, when done correctly, it can raise the efficiency and effectiveness of existing procurement processes and activities.
Elemica’s recent report explores how it’s possible to optimize sourcing and procurement processes through digital connectivity.
This filters through processes such as strategic sourcing, purchasing execution, supplier negotiations, contract management, ESG compliance support and more. How is digitalisation shaping procurement for the better?
1. Digitalisation enables a vast variety of elements of procurement to be improved on
“Businesses are able to leverage these technologies in revolutionary ways to redefine processes and potential progress across the balance sheet”. Elemica
Companies such as IBM, U.S. Steel, ExxonMobil, Procter & Gamble, General Electric and General Motors leveraged data to support decisions in strategy, finance and operations. Common procurement tools appear in the report, including industry 4.0 technologies including: Cloud Computing, Artificial Intelligence, Robotic Process Automation and Internet of Things
2. Speeds up the procurement process
“Digital procurement platforms can take cycle times from seven days to two”. APQC
Efficiency is accelerated, making operations smoother and more cost-effective.
3. Digitalisation is CRUCIAL towards procurement operations
4. Money is saved!
A fully automated procurement function worldwide could save the Global 5000 up to $86 billion each year.
5. The entirety of the supply chain can be automated
Supplier transactions that might have taken weeks to negotiate, can now be completed digitally and in fractions of a second thanks to the right technology. Tools exist for companies to collect data and act in the most strategic, competitive way.
6. Key Procurement KPIs for Success
“It’s important not to let your procurement digitization effort stray into the realm of the subjective. The capture of hard metrics and other key performance data before and after implementation is essential to gauging implementation success and getting leadership buy-in for future digitisation efforts.” Arun Samuga, Elemica Chief Technology Officer
- PO Accuracy Rate
- PO Cycle Time
- Cost per Purchase Order
- Average Supplier Lead Time
- Spend Under Management
- Supplier Compliance Rate
- Supplier Defect Rate
Key Takeaways
Key points to achieve procurement automation success:
- Get Leadership Involved
- Capture Before and After Metrics
- Elect Project Champions
- Keep Project Management Tight
- Set Realistic Expectations
- Attempt to Over-Communicate
(0) comments